mobile

An article of the Financial Times on the 9th of April reveals that some of Europe’s leading telecoms groups, Telefonica, France Telecom and Deutsche Telekom claim that Google has to start paying them for the use of their infrastructure for the Google’s services, mainly for Youtube. The high bandwidth needed for services like Youtube makes the telecommunication companies invest more and more money in upgrading their infrastructures, without offering them the profits needed in order to cover the expenses for the upgrades. A return in the investments they make is vital for their growth and success, so the sharing of Google’s online advertising revenue with the telecoms groups seems to be the solution to the problem. At least that is what the telecommunications companies ask Google to do.

I have posted on this blog the problem the Mobile Services companies faced in the UK by the wide use of smartphones which increased the need of higher capacity in central London. There was another case which came out the last days, according to which the services provided through the infrastructure influenced the infrastructure itself. At&T will upgrade its network in order to cope with the new iPhone device coming out in summer 2010 (this investment is mainly done because Verisson Wireless is going to give the iPhone devices in the US market from summer onwards).

The three aforementioned cases may not seem connected to each other, their common characteristic though is the connection between the services provided though the infrastructure, and the investments done for the infrastructure in order to cope with the services provided. The Google/telecoms groups case adds another constrain to that connection, where the company offering services over an infrastructure (usually adding value to the infrastructure for the users to use it) may has to give part of its revenue to the company owning the infrastructure.

A recent article (December 28th) in the Financial Times titled “O2 apologises for snags in London network” is thought to describe a new problem mobile network companies will have to face in the near future, related with the new services provided through the smartphone/pda style phones.

The mobile companies around the globe have invested in new services which are mainly offered through the “smart” phones, enabling the users to access Internet services easily (e.g. Apple iPhone, Blackberry). It seems though that the same services that can help the mobile network companies to increase their profits, they can easily become a threat. This happened to O2, the largest mobile operator in UK, which has been facing network problems since summer, since its customers face difficulties in accessing the network and make phone calls. This problem is said to be experienced only in the area of London, while the problem will be solved by the company by installing 200 additional base stations in the area, increasing the capacity of the network. The article also mentions that O2 will work together with Apple and Research in Motion (Blackberry maker) to optimize the network by gaining knowledge on which applications could place heavy demands on the network.

Other mobile operators around the globe will face the same problem in the near future. The New York Times have recently mentioned that AT&T faced similar problems in providing services to iPhone users.

This incidents shows that the mobile operators have to include new aspects in their investments since the applications used by the customers have increased significantly since the old times that users were using only voice and text services.

Finally, it seems that the increase in the demand of the “new” services is quicker than the process companies follow to examine and then assess possible risks about the network.